Interim Management Statement

Afren plc (AFR LN)

Interim Management Statement

London, 19 May 2011 - Afren plc ("Afren" or the "Company"), issues the following Interim Management Statement, in respect of the period 1 January 2011 to 19 May 2011, in accordance with the reporting requirements of the EU Transparency Directive. Information contained within this release is un-audited and is subject to further review.

Highlights

u Ebok (Nigeria) - production from Phase 1 has been steadily increased to a sustained flow rate in excess of 17,000 bopd, ahead of guidance

u Okoro (Nigeria) - gross production increased to 21,000 bopd; near field Okoro look-a-like exploration target identified

u Okwok (Nigeria) - work progressing to determine optimal development solution; gross recoverable resource estimate increased to 51.8 mmbbls

u Keta Block (Ghana) - ongoing studies showing potential of Turonian intervals, leading to increase in gross prospective resources to over 1.4 billion bbls

u Active near term exploration and appraisal drilling campaign targeting net prospective resources in excess of 630 mmbbls

Commenting on today's IMS, Osman Shahenshah, Chief Executive of Afren plc, said:

"We are very pleased to have increased production at the Ebok field to current levels in excess of 17,000 bopd, ahead of pre start-up expectations. Together with the recent infill drilling at Okoro, group wide operated production is over 40,000 boepd (approximately 30,000 boepd net to Afren). The Company will be drilling a number of high impact wells across both West and East Africa, and together with a strong acquisitions pipeline, Afren is very well positioned as we move towards the second half of the year."

Production and development operations update

Ebok

In February 2011, Afren successfully installed the production processing and storage facilities and commenced production operations at the Ebok field, located offshore south east Nigeria. Afren and its partner Oriental Energy Resources have adopted a phased approach to the development of the field that incorporates two un-manned wellhead platforms, one positioned in the Central Fault Block area and one at the West Fault Block, tied back to a Mobile Offshore Production Unit (MOPU) where crude oil is processed; it is then transported to a Floating Storage Offloading vessel (FSO) spread-moored nearby, where it is stored prior to sale directly into the international market. Production from Phase 1, targeting the Central Fault Block area of the field, has been steadily increased to a sustained flow rate in excess of 17,000 bopd from five wells, ahead of pre start-up expectations.

Phase 2 development drilling, targeting the West Fault Block area of the field, is currently underway with the GSF High Island VII jack up drilling rig. Having already drilled four pilot wells in 2010, as part of the initial work programme, Afren has now installed the conductor casing for the first five production wells from this location. Phase 2 production is expected onstream at a rate of 20,000 bopd.

Ongoing work programme

Development Phases 1 and 2 are expected to access approximately 60% of the independently certified 2P reserves base of 106.2 mmbbls. In order to access the remaining 2P reserves and incrementally build production towards MOPU capacity of 50,000 bopd, Afren and its partner Oriental plan to continue with the ongoing development of the field, post Phase 2, through to end 2012 by utilising the 12 available well slots to drill additional horizontal production wells into as yet un-produced reservoirs.

Okwok

It is planned that the Ebok development will become a central hub for the broader Ebok/Okwok/OML115 area, allowing for the economical and rapid monetisation of any future developments in the surrounding area.

Having defined the Okwok field as a commercial development, with NSAI ascribing 51.8 mmbbls of gross recoverable resources, work is currently ongoing to determine the optimal development concept for the field. Given the scale of recoverable resources already proved, it is now considered most likely that Okwok will require a stand-alone development solution. In order to assist with development planning, and to test further upside potential, the Company plans to drill an additional appraisal well at the field in 2011 and acquire new 3D seismic over the area.

Okoro

Gross production at the Okoro field in Nigeria averaged 14,200 bopd, for the first quarter of 2011. The two well infill drilling programme has been completed, with the Okoro-11 and Okoro-12 wells now onstream. As a result, gross production at the field has increased to 21,000 bopd. Process uptime of >98% has been maintained with the crude export process, via the nearby Ima terminal, continuing to run smoothly.

Ongoing studies of the field and immediate surrounding area have identified additional future drilling targets. In particular, the Okoro East prospect has similar sub surface characteristics to the main Okoro field, and is estimated by management to have similar resource potential. The Company is exploring options that could potentially result in the drilling of this attractive near field target in 2011.

CI-11 and Lion gas Plant

Production operations continued at the Company's assets in Côte d'Ivoire during the period. Gross production to 31 March 2011 at the CI-11 field offshore Côte d'Ivoire was 15.9 mmcfd and 950 bopd. Production levels were below expectation during the first quarter as a result of political and social unrest delaying the import of necessary equipment and resources required to conduct routine maintenance of the compressor unit. The repairs to the compressor unit are now complete and production levels have been restored to normal gross rates of around 30 mmcfd. The Company continues to evaluate measures to optimise production from existing wells and define potential infill drilling targets that could incrementally add to reserves and production.

OML 26

Post completion of the acquisition of a 45 per cent. interest in OML 26, Afren and FHN will seek to establish together with NNPC a three phase development plan for the Ogini and Isoko fields, with the goal of ultimately increasing gross production to a rate of 50,000 bopd. Under the proposed development plan, initial work will be focused on certain "quick-win" opportunities including low-cost workovers of existing wells and re-activation of gas lift. Once implemented, these measures are expected to increase gross field production by around 50 per cent on current levels (ca 5,000 to 6,000 bopd). The partners would then mobilise a land rig to the field location and expect to commence the initial drilling of six horizontal production wells by the end of the year.

Exploration and appraisal operations update

Ghana - Keta Block

In March, the Company announced the farm down of a 35 per cent. interest in the Keta block and operatorship to ENI (Afren retains a 35 per cent. interest). In exchange the Company will receive a carry through the drilling of one exploration well, back costs and carry through seismic in the next exploration phase and a milestone bonus payable upon first production being achieved at the block. Ongoing subsurface studies have yielded positive results, further validating existing prospectivity and in particular identifying substantial additional potential in large scale Turonian intervals analogous to those that have proven to be oil bearing at the large Jubilee field and other discoveries to the west. On this basis NSAI has independently increased its estimate of gross prospective resources to over 1.4 billion bbls. The partners plan to drill the 325 mmbbls Cuda prospect during the third quarter.

Nigeria - OPL 310

The Company has launched a formal process to farm down a portion of its current 70 per cent. interest and attract an industry partner to participate in future exploration of this high potential block. The outcome of the bidding process, with results anticipated during the second half of the year, will determine the timing of exploration drilling on the block. Plans are also in place to acquire additional seismic on the block.

Nigeria - Ebok and OML 115

The partners plan to drill an exploration well in the second half of the year targeting Ebok North, an untested fault block in the northern area of the field where the Company believe the same reservoirs that have been proved to be oil bearing elsewhere at the field are also present. Gross unrisked prospective resources are estimated at 35 mmbbls.

An exploration well is also planned on OML 115 that will be drilled during the second half of the year. The Ufon prospect is a 60 mmbbls target that is interpreted to have oil prospectivity in the same D series reservoirs that have been proven to be oil bearing at the nearby Ebok and Okwok fields.

Nigeria - São Tomé & Príncipe JDZ

The new operator is seeking to reprocess existing seismic data and has proposed the drilling of one appraisal well on the Obo discovery in 2011 and one exploration well in 2012. Afren has a 4.41 per cent. interest.

Kenya - Block 1

The partners on Block 1 have defined a work programme that involves the acquisition of up to 1,200 km of 2D seismic data in addition to airborne gravity and magnetic data in 2011. Several major structures have already been mapped on the block that currently has 850 km of 2D seismic coverage.

Kenya - Block 10A

The Tullow Oil operated joint venture acquired 750 km of 2D seismic over the block during the first quarter of 2011 to supplement the existing 2D coverage of 2,631 km. Integration of the new data and interpretation is underway, with encouraging early results. This work satisfies all seismic obligations for the current exploration period. The operator has proposed the drilling of one exploration well during the fourth quarter.

Kenya - Block L17/18

Following completion of a 400 km 2D seismic acquisition programme in 2010, a number of newly defined prospects and leads have been identified on the acreage. The Company intends to acquire additional 2D seismic over parts of the blocks in 2011 and is seeking to commence exploration drilling by year end, dependent on rig availability. Given the geographical proximity and geological similarities between Kenyan blocks L17/L18 and the Tanga block in Tanzania, the Company is assessing options to co-ordinate future drilling plans across the blocks.

Tanzania - Tanga Block

On 24 March 2011, Afren announced the acquisition of a 74 per cent. operated working interest in the Tanga Block, located offshore Tanzania. Immediately post completion, Afren commenced, and has now completed, a 751 km shallow water 2D seismic programme. Early results are encouraging, and provide excellent definition of several large scale prospects and leads that have been identified to date, together with new zones of additional potential. Dependent on securing a drilling rig, the partners on the block intend to commence exploration drilling by year end.

Ethiopia - Blocks 2,6,7,8

During 2010 a 2D seismic acquisition programme was completed across the onshore Blocks 2, 6, 7 and 8. Within the current exploration period, the partners have obtained 15,000 km of airborne gravity and magnetic data, 551 km of 2D seismic data and are required to drill one exploration well. Work is ongoing to further interpret the prospectivity of the block ahead of expected drilling in 2012.

Madagascar - Block 1101

An environmental impact assessment (EIA) has been submitted to the Malagasy authorities in preparation for exploration drilling on Block 1101 targeting an estimated 150 mmbbls prospect. As part of the work commitments associated with the current exploration phase, the partners have carried out interpretation work on the existing 200km seismic data set acquired in 2008, field mapping, geochemical surveys and analysis.

Seychelles - Blocks A,B,C

Seismic data acquired to date by the partners have revealed the presence of several large scale structures in all three licence areas, in addition to new basins that could also contain significant Jurassic sedimentary sections. The partners intend to acquire new seismic data during the second half of 2011 over Blocks A,B and C, ahead of expected exploration drilling in 2012.

South Africa - Block 2B

The near term work programme involves the acquisition of 350 km2 of new 3D seismic data, with reprocessing of existing 2D seismic and ongoing seismic inversion and regional biostratigraphy studies ahead of expected exploration drilling in 2012.

Forward exploration and appraisal drilling schedule

* Pre/post cost recovery economic interest

** Awaiting confirmation from operator

Financial position

Revenue in the first quarter was US$73.4 million (2010: US$84.6 million). Working interest production in the period was 9,700 boepd reflecting cost recovery at Okoro (2010: 20,700 boepd pre cost recovery). The company realised an average oil price of US$104.1/bbl (2010: US$75.3/bbl) and an average gas price of US$7.62/mcf (2010: US$5.30/mcf). Profit before tax for the period was US$2.0 million (2010: US$18.2 million). The reduction in profit is attributable in large part to losses on derivative financial instruments, arising from mark to market movements on hedging contracts and also finance costs associated with the early repayment of debt following the bond issue in the period. Tax charge for the period of US$13.3 million (2010: US$10.2 million) has increased due to the lower tax loss position in Nigeria. Normalised profit in the period was US$8.7 million (2010: US$16.4 million). Normalised profit excludes the effect of unrealised hedge movements, share related costs and cost of early debt repayment following the bond issue.

In January 2011, Afren became the first UK listed independent E&P company to successfully issue a High Yield Bond, initially raising US$450 million with a subsequent tap issue in February raising an additional US$50 million. The Company used part of the funds to repay borrowings amounting to US$175.6 million (net of issue costs) and accrued interest of US$1.3 million of its existing facilities. The remaining funds raised by the bonds will be used to fund further organic and inorganic growth activities. Net current assets stand at US$245.8 million (2010: US$86.8 million net liabilities) following the restructuring of the debt and the new funds raised from the bond. Projected capital expenditure for 2011 is US$450 million with total capital expenditure in the period of US$132.3 million (2010: US$48.3 million). Net debt as at 31 March 2011 was US$291.6 million (2010: US$127.5 million) with cash at bank of US$333.1 million (2010: US$140.2 million).

Outlook

Afren expects net production to increase substantially over the remainder of the year, primarily as a result of the ongoing development work programme at the Ebok field. Full year net working interest production is expected to average approximately 40,000 boepd. In 2011, the Company will also participate in several high impact exploration wells that each have the potential to materially add to Afren's existing reserves base. With substantial increased cashflow from operations combined with its debt facilities and cash resources, the Company is well positioned to fund its next stage of growth and continue to deliver value to shareholders.

Ends.

Notes to Editors

Afren is an African focused independent oil and gas exploration and production company listed on the main market of the London Stock Exchange and constituent of the Financial Times Stock Exchange Index of the leading 250 UK listed companies. Afren has a portfolio of 29 assets across 11 countries spanning the full cycle E&P value chain. Afren is currently producing from its assets offshore Nigeria and Côte d'Ivoire. Afren has exploration interests in Ghana, Nigeria, Côte d'Ivoire, Congo Brazzaville, the Joint Development Zone of Nigeria - São Tomé & Príncipe, Kenya, Ethiopia, Madagascar, Seychelles, Tanzania and South Africa.

For further information please refer to www.afren.com

 Comprehensive income/(loss) for each period was equivalent to profit/(loss) after tax for each period presented.

1. Basis of accounting and presentation of financial information

The condensed Group interim financial statements comprised of Afren plc (''Afren'') and its subsidiaries (''the Group'') have been prepared in accordance with International Accounting Standard (''IAS'') 34, ''Interim Financial Reporting'', as adopted by the International Accounting Standards Board. The condensed group interim financial statements for the three months ended 31 March 2011 have been prepared solely for the purposes of compliance with the terms of issue of the senior secured loan notes. The condensed Group interim financial statements are unaudited, and do not constitute statutory accounts as defined in sections 435(1) and (2) of the Companies Act 2006. Statutory accounts for the year ended 31 December 2010 were published and copies of which will be delivered to the Companies House. The report of the auditors on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain any statement under sections 498(2) or (3) of the Companies Act 2006.

Changes in accounting policy

The same accounting policies, presentation and methods of computation have been followed in these condensed Group interim financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 December 2010.

Going concern

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed group interim financial statements.

2. Profit/(loss) per share

3. Reconciliation of normalised profit/(loss) after tax to the profit/(loss) after tax

4. Operating Segments

For management purposes, the Group currently operates in four geographical markets: Nigeria, Côte d'Ivoire, Other West Africa and Eastern Africa. Unallocated operating expenses, assets and liabilities relate to the general management, financing and administration of the Group.

4. Operating Segments continued

4. Operating Segments continued

5. Senior secured loan notes

6. Contingent liabilities

There has been no change to the contingencies reported in the annual report for the year ended 31 December 2010.

7. Subsequent events

None to report.

8. Related parties

The following table provides the total amount of transactions which have been entered into with related parties during the three months ended 31 March 2011 and 2010:

Trading transactions

Energy Investment Holdings Ltd is the contractor company for the consulting services of Bert Cooper, a member of the International Advisory Board and Special Adviser to Afren plc. The payments relate to consultancy services provided during the year.

St. John Advisors is the contractor company for the consulting services of John St. John for which they receive fees from the Company, a Non-Executive Director. St. John Advisors also receive a monthly retainer of £15,000 for consulting advice. This contract is for 12 months from 27 June 2008 and automatically continues thereafter unless terminated by either party. In 2010 a separate contract with STJ Advisors LLP, another contractor company related to John St John, was engaged for consulting services on the Senior Secured Loan Note offer which completed on 27 January 2011. In 2011 John St. John received US$1.3 million success fee in relation to this contract.

Tzell Travel Group operates as a franchise. The franchisee utilised by Afren for some of its travel needs is a close family member of the Chief Executive Officer and Tzell Travel Group is therefore considered a related party. Afren uses several travel agents as there is a significant travel element to its operations and Tzell competes on an even basis with these. Tzell provided approximately 5% (2010: 6%) of the travel arrangements by value.